Government releases proposed rules for stricter regulation over e-commerce platforms

THE Union government released proposed amendments to the new Consumer Protection (E-Commerce) rules, 2020 for regulating e-commerce platforms. The proposed draft was released by the Department of Consumer Affairs on its website on June 21.

A slew of amendments has been proposed under the new rule. The government claims that these amendments will bring more transparency to these platforms and make them more accountable to their consumers. The government had notified this rule in July last year.

Currently, all e-commerce companies are registered under the Companies Act, the Indian Partnership Act, or the Liability Act. The government wants them to register with the Department for Promotion for Industry and Internal Trade (DPIIT). The companies are also required to display the registration number and invoice orders on their website in an accessible manner.

Every e-commerce entity is required to form a grievance redressal mechanism for addressing consumer grievances. Under this mechanism, the companies must appoint a Redressal Grievance Officer, a Chief Compliance Officer, and a 24*7 Nodal Officer.

Every e-commerce entity is required under these rules to  provide the following information in a clear and accessible manner on its platform:

(a) The legal name of the e-commerce entity.

(b) Principal geographic address of its headquarters and all branches.

(c) Name and details of its website.

(d) Contact details like email address, landline, and mobile numbers of customer care as well as of a Grievance Officer.

(e) No e-commerce entity shall adopt any unfair trade practice, whether in the course of business on its platform or otherwise.

The new rule seeks to ban the “flash sales” used extensively to benefit a specified seller or a group of sellers and prevent a level playing field. The government, however, has clarified that conventional sales are not banned which only intends to attract customers to the platform.

The ban on misleading advertisements is one of the major proposals. However, due to the lack of clarity, it is often open to different interpretations.

The platforms engaging in cross-selling of products must provide adequate disclosure to their consumers.

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To push the sales of domestic manufacturing goods, the centre has decided to tighten the “country of origin” norm.

The new rules propose that “details about the sellers offering goods and services, including the name of their business, whether registered or not, country of origin, their geographic address, customer care number, any rating or other aggregated feedback about such seller, and any other information necessary for enabling consumers to make informed decisions at the pre-purchase stage.”

The rule specifically intends to target Chinese products and reduce their share in the Indian market. This demand has been with the government for some time and grew stronger post the Galwan Valley clash which resulted in the killing of 20 Indian soldiers.

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Addressing the customer complaints of being cheated by the platforms with receiving different products than that shown on the platform, the rule read: “Every marketplace e-commerce entity shall require sellers through an undertaking to ensure that descriptions, images, and other content pertaining to goods or services on their platform is accurate and corresponds directly with the appearance, nature, quality, purpose, and other general features of such goods or services.  Every marketplace e-commerce entity shall provide the following information in a clear and accessible manner, displayed prominently to its users at the appropriate place on its platform.”

Also read:  Comments_eCommerce_Rules2020.pdf (

The government has now invited suggestions from the citizens on this rule. “Views, comments and suggestions on the proposed amendments may be sent by July 6, 2021 by email to [email protected],” Anupam Mishra, Joint Secretary, Department of Consumer Affairs in Ministry of Consumer Affairs, Food and Public Distribution.